New York horse racing lost $109 million over four years

State Controller Thomas DiNapoli found NYRA depends on revenue from video lottery terminals — $22.2 million in 2014 — to remain profitable and used some questionable accounting practices to bolster the finances of its horse racing operations. (Braganti, Tanya, NYDN Freelance/Braganti, Tanya, NYDN Freelance)

ALBANY — Horse racing was a losing bet for the operator of New York's thoroughbred tracks, a new audit revealed.

Just in time for the Belmont Stakes, state Controller Thomas DiNapoli on Friday released an audit showing the New York Racing Association lost more than $109 million on its traditional racing operations between 2010 and 2014.

Advertisement

DiNapoli found NYRA depends on revenue from video lottery terminals — $22.2 million in 2014 — to remain profitable and used some questionable accounting practices to bolster the finances of its horse racing operations.

"NYRA needs to come up with a plan to make money on racing operations, especially as it seeks to return to private control," DiNapoli said. "Without such a plan, NYRA's long term solvency could be a long shot."

The association, which operates the Belmont, Aqueduct and Saratoga tracks, declared bankruptcy in 2008 and was eventually taken over by the state.

DiNapoli said NYRA excluded key expenses — including pension and retiree health care costs — from its calculations to make its traditional operations appear profitable.

The association, which operates the Belmont, Aqueduct and Saratoga tracks, declared bankruptcy in 2008 and was eventually taken over by the state. (Corey Sipkin/New York Daily News)

In 2014, NYRA reported a surplus of $1.7 million without VLT revenue. In reality, according to DiNapoli, the agency lost $11.5 million on racing.

DiNapoli also raised questions about certain NYRA expenses, including a $250,000 bonus to its chief executive officer for developing a plan to achieve a balanced budget.

NYRA officials said their actions were proper.

"The purpose of the (controller's) audit was to determine if NYRA received, spent and accounted for its revenues and expenses properly, and the (controller's) report clearly states that we did," said NYRA spokesman Pat McKenna in a statement.